Asian stock market, economy and companies update (March 21, 2014)

***Highlights/Observations/Insights***
- Federal Reserve released its bank stress tests after US market close, and out of 30 key banks tested only Zions was deemed to fall short of minimum capital levels under stress scenario. Zions issued a press release afterhours, stating it plans to resubmit capital plan, which will contain additional actions to further reduce risk. The bank also said that its original submission to the Federal Reserve occurred prior to the sale of certain collateralized debt obligation securities (CDOs) in January and February 2014, sales of which also resulted in a substantial reduction in risk.
- Nike initially rose on earnings that beat on top and bottom line, but sold off over 3% after a particularly troublesome set of conference call comments. NKE sees Q4 Rev growing at a high single-digit rate (below futures rate) due to timing in shipments, and also projects devaluation in emerging currencies to result in significant headwinds on FY15 revenue, GMs, and profit growth. And while China revenue grew on the year in Q3, Q4 performance in the company's second biggest and most critical market was projected to be flat to slightly down.
- China markets started out modestly higher, before paring some of the initial gains. NDRC downplayed default risk in corporate bonds, while 2 of China's top banks - ICBC and CCB - were repored to have suspended distributing high-yield trust products. China yuan remained under pressure with another fix in USD/CNY at multi-month highs but offshore Yuan was little budged, as parity briefly fell below that critical 6.20 level. A report from China National Energy Administration (NEA) underscored the extent to which the off-month timing of the Lunar New Year impacted data - Feb power consumption was up an impressive 13.7% while Jan-Feb up only 4.5% y/y. Markets await more clarity over the extent of China slowdown from the upcoming HSBC Flash manufacturing PMI to be unveiled on Sunday evening.

- USD majors traded without much direction in US hours and continue to lack conviction in Asia. EUR/USD was under significant pressure after the FOMC decision, but has since settled above the $1.3750 support - which has previously marked an inflection some 2 months back. USD/JPY is also consolidating overnight bullish USD momentum, trading in a 25pip range over the past 12 hours. AUD/USD popped up above the $0.9060 level, rising about 30pips from the lows. Going into the weekend, the focus will once again be on China, where March HSBC flash manufacturing PMI will be released on Sunday night. This will mark the first release that will not be clouded by the timing of the Lunar New Year said to be the culprit for the soft data in February.